I am looking at two mobile home parks here in the South (Alabama) that need a complete renovation. Anywhere from 20-30 parks removed that are way old, broken windows, etc. and Im thinking of replacing them with new homes a few at a time. Id like them all to get pulled first for a clean slate and a new look to the park.
Does anyone know an approximate cost of haulaway, pouring new asphalt around the property, etc. New electrical, water pipes, sewage, etc?
Any recommendations on a builder down here? Looking for a 3/2, 1000+ sq ft.
Bram Klein, Investor
@Bram Klein sounds like a big job. I have a contact at Clayton if you'd like to chat with them.
Where are you looking in Alabama?
@Bram Klein The tear down, hauling, and site prep will vary substantially by area but prepare for $10k per site as an extremely rough guideline. The water and sewer connections, assuming you anticipate hooking up new connections to the municipal lines, can vary substantially depending on the municipality's fees. This can be $1k-$5k per new connection but definitely contact the city planning and/or development body to get exact figures.
I recommend that you explore community financing programs to keep capital outlay low (e.g., Vanderbilt and 21st Mortgage). There are some downsides to these programs but they definitely help keep cash requirements low at closing. Some programs will allow you to finance and/or will reimburse you for site prep expenses, which is also nice.
Before you pursue the infill/overhaul initiative and base it on new home sales, you should have reasonable assurance that your market can “digest” new homes. Infill / overhaul initiatives that utilize new homes can work well but only if there’s sufficient demand for housing at $35k-$45k (~$400/month payment + lot rent). If alternative housing options are close to the sum total of the above, you may have trouble filling your new homes. Talk to local dealers to check the new home sales volume, determine vacancy rates in local parks, and discover which models/floor plans are selling in the area.
We’re working on two projects, on in NC and one in TX, right now that are similar to what you describe. Reach out to me directly if you’d like to discuss ideas and approaches further.
Generally speaking this project may be too expensive relative to your potential return (if any). Or you will see good/great returns but won’t see it for a while. Just my two cents.
@John Jacobus John, thanks for your reply. Whats the best number to reach you at and in the meantime Ill look at the items you recommended. It sounds like you have the experience Im lacking.
Thanks, Bram Klein
@Gulliver R. I agree although someone elses deferred maintenance can be my riches after my sweat equity and investment.
@Ryan S. Reach out to me and Ill offer more information. I dont have them locked up yet as Im running my numbers for clearance and cost to upgrade. Thanks for your military service!
@Micki M. Sure Im interested. Just running numbers now for new single wides.